Chinese Tech Stocks Down But Not Out As Sentiment Shifts (FA)

FinanceAsia has noted that Chinese tech stocks have suffered from a shift in sentiment with Cheetah Mobile Inc (NYSE: CMCM), a spin-off from popular Chinese software developer Kingsoft Corporation Limited (HKG: 3888), having to rely on support from shareholders Xiaomi and Baidu Inc (NASDAQ: BIDU) to get its initial public offering over the line earlier this month. In addition and after peaking at $58.32 a share in early March, internet company 58.com Inc (NYSE: WUBA) is down more than 30% while Autohome Inc (NYSE: ATHM) had hit a 2014 high on March 5 of $51.76 and is also down more than 30%. Joaquin Rodriguez Torres, head of technology, media and telecom investment banking for Asia at Deutsche Bank, told FinanceAsia:

“We’re seeing a fairly significant correction out of high multiple, high growth stocks into more value-driven stocks…. The sentiment was very good; high quality companies got people’s attention — people were eager to get access to the management teams and make a positive impression on them. Now the sentiment has changed and even the high quality companies have to make a bigger effort to get investors’ attention.”

However, he latter added:

“Investors are in the business of putting money to work, so now that macro volatility has fallen they need to make real investment decisions — and the reality is that there’s no better way to generate returns than to invest in high-growth companies: companies that are profitable, disruptive and can sustain growth without having to raise more capital. That means tech.”